Inflation

207 views
168 views

Published on

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
207
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
17
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Inflation

  1. 1.  Inflation can be defined as acontinuous increase in the generalprice level of goods and services inthe economy Deflation refer to a decrease inthe general price level of goods andservices in the economy.
  2. 2. X 100YEAR CONSUMER PRICE INDEX (CPI )2010 1222011 135
  3. 3. Demand - pull inflation Demand –pull inflation occurs when aggregatedemand (AD) exceeds the aggregate supply(AS).It is caused by a rise in AD which may be dueto rise in consumer demand, or an increase inthe government expenditure, or a rise ininvestment by firm, or an Increase in demand forthe country’s export by people in foreigncountries or a combination of the four.
  4. 4.  MONETARY POLICY Moneytary policy which consist of controlling the supply of money by central bank is enford by using the different moneytary instrument aimed at reducing the supply of money. Open market operations-selling of securities or short-term bonds Raising the reserve requirement Raising the discount rate/bank rate Raising the interest rate Selective credit control policy
  5. 5.  FISCAL POLICY A deacrease in government spending and an increase in the government’s total tax revenue will produce a surplus budget. Increase in taxes Decrease in government spending
  6. 6.  DIRECT CONTROL MEASURES Price control and rationing Anti-hoarding campaign Compulsory savings

×